ACCC raises objections and questions about Qantas’ acquisition of Alliance
Recently, the Australian Competition and Consumer Commission (ACCC) expressed opposition and skepticism towards Qantas’ AUD 614 million acquisition of Alliance, and explicitly stated that the ACCC is ready to present its views and reasoning in court at any time. As a result, Alliance Airlines’ stocks fell 6.3% to AUD 3.29 on Thursday, while Qantas’ stocks remained steady at AUD 6.26.
Specifically, on Thursday morning this week, the ACCC completed its marathon 11-month review of the acquisition and concluded that the transaction would harm the airline industry and broader economic development. In particular, the ACCC scrutinized at length Qantas’ existing 19.9% stake in Alliance and raised a series of questions about the acquisition in August.
In an interview, ACCC Chair Gina Cass-Gottlieb stated that Alliance is a strong competitor to Qantas and an important competitive constraint, while Qantas is an important competitive constraint for the Alliance. ACCC’s main focus is on Queensland and Western Australia, where most other airlines lack the specific aircraft and fleet size required for efficient operations and effective competition.
Qantas Airways expressed disappointment to the decision to the Australian Securities Exchange and stated that it will seek a meeting with the ACCC, but did not indicate whether it will appeal. Meanwhile, Ms. Cass-Gotlieb stated that the ACCC has requested Qantas and the alliance to consider their objections and will consider further meetings. If Qantas chooses to take the matter to court, the ACCC will be ready to present their views and reasons in court at any time.
From a regulatory perspective, Ms. Cass-Gotlieb advocates for the development of stricter competition laws, requiring companies to obtain formal approval before any mergers can take place. (The picture is from relevant articles in the Australian Financial Review)
